ESG investing has two main objective, says Pendal ESG credit analyst Murray Ackman.
“One is about avoiding a financial loss or achieving an upside, and two is about bringing about change.
“Avoiding your financial loss or achieving an upside becomes pretty relevant when we’re looking at unsustainable areas or sectors that might be regulated out of existence.
“The quintessential stranded asset is coal plants, which will have limited use when renewables make up a much larger part of the electricity grid.
“It could also be areas where regulations, sanctions or potential changes in the future will impact the viability of various assets.
“This doesn’t necessarily mean that these types of assets are going to go to zero. It just means it could be unpopular, shrinking or there’s low liquidity in the area.
“The non-financial components can be simply that you don’t like what the industry or a particular company is doing.
“We’ve seen controversies becoming much more prominent as a reason why investors are looking to get out of a particular investment.
“You can have a lot of influence over businesses, but countries are a lot bigger and a lot harder to influence, though there have been examples such as South Africa.
“The Russian example is perhaps a little idiosyncratic because there’s widespread sanctions and the speed and scale of condemnation in the west is very unique.
“Very few businesses have applied the same standards to other countries that have invaded sovereign nations although we can see the English Premier League is starting to question this in regard to Saudi Arabia and Yemen, so maybe this will change.
“We’ve seen that things happen and there is a resetting of the status quo view, so perhaps this is a watershed moment on the way in which we invest in countries.”
Pendal Sustainable Australian Fixed Interest Fund
A defensive bond fund with strong performance and positive environmental and social outcomes.
Credit ESG analyst Murray Ackman joined Pendal’s Income and Fixed Interest team in 2020 to provide fundamental credit analysis and integrate Environmental, Social and Governance factors across credit funds.
Murray has worked as a consultant measuring ESG for family offices and private equity firms and was a Research Fellow at the Institute for Economics and Peace where he led research on the United Nations Sustainable Development Goals.
Pendal’s Income and Fixed Interest boutique is one of the most experienced and well-regarded fixed income teams in Australia.
The team’s awards include Lonsec’s Active Fixed Income Fund of the Year (2022) and Zenith’s Australian Fixed Interest Manager of the Year (2020).
Regnan Credit Impact Trust is a defensive investment strategy that puts capital to work for positive change.
Pendal Sustainable Australian Fixed Interest Fund is a defensive Australian bond fund that delivers market-leading performance with positive environmental and social outcomes.
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